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as washington grapples with the economy, entrepreneurs are doing the same. why lawmakers shouldn't look to small business owners to make a dent in the jobless rate, and we do an intervention with the owner of a house cleaning business who needs to clean up her act. that and more coming up next on "your business." small businesses are revitalizing the economy, and
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american express open is here to help. that's why we are proud to present "your business" on msnbc. hi there, everyone. i'm j.j. ramberg. welcome to "your business," tips and advice to make your business grow. the government and congress continue to try get a handle on the nation's economic problems while main street america including small businesses struggle with high unemployment. a lot of talk out of capitol hill as small business being job creators. a new report shows small business start-up, opening with fewer employees and aren't hiring once they get going. robert leighton is the vice president of a foundation, and reba is the ceo of pro biz media
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and the ceo of predictable success. a consulting company and brad harrison is the founder and ceo of vhv, a business accounting firm with a small business venture capital fund. thanks for joining us. jate to see you. robin, since this report comes out of you, you put a report out a year ago aing small business it engine that drives the economy in terms of job growth and now one year later coming out saying those small businesses aren't even hiring. what does that mean for the economy? >> so actually what our previous report said, it's not just any small business, it's really new businesses. those under five years old that have been responsible for the, for virtually all of the new jobs since 1980, but then what we've done is, in the last year we took a second look, and we tried to qualify the impact of the recession, and asked ourselves, well, is the new job business or the new -- or is the
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new firm start-up business engine slowing down janld the answer is, yes. we found that actually the number of jobs that are created by new firms started slowing in 2005 and then took a dramatic dip during the recession and really hasn't returned. >> robert, is this a function of -- in part it is. how big of a part of firms failing or firms not having the capital to grow versus technology? >> that's a very good question. actually, the raw numbers don't give an answer to it. all we can do is make guesses. the fact that the numbers started falling before the recession may mean that the new business sector was a canary in the coal mine saying the economy was going to slow down. i think once the recession hit it's pretty clear the difficulty of getting capital has got to be affecting a lot of firms. it may not affect firms doing business on the internet because they can go to the cloud. it's a lot easier and cheaper
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these days to use technology to start your business, but if you're having a, you know, a restaurant or any other business that's got capital and so forth, you can't do all of your business on the internet. so that capitalism, that's scarce due to the recession. >> i want to ask you, brad, you deal with a lot of new businesses. do you find people aren't growing as quickly as they were a few years ago? >> i think they will be more conservative, because it is very difficult to raise capital and so that adds uncertainty. if your business doesn't go exactly as planned you might run out of capital. what people are really doing, hiring fewer people and asking them to do more. you have a lot of companies where in the past you might have a sales person, a marketing person, a biz person, technology person. now one person doing sales and marketing. one person doing two jobs. >> and des, i'm assuming, you consult people and tell them do
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more with less? >> yes, and as we discussed, the technological impact is one thing, but the other aspect of all of this is that the concept of the fte, full time employee, is getting increasingly updated. i don't have any employees, except me, but i have 16 people who i pay money that contribute to what i do. and any new business starting up in the last five years, be responsible, try to have various responsible relationships with people doing work in the otherwise the -- the fte. a lot less of that happening, as brad said. people are looking for ways to step in. >> you keep shaking your head. we talked about this before. people being flexible, these contractors and part-time employee. up see that a lot as well. right? >> i do.
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my business is one of those businesses, we're about 3 1/2 years old, and we're still the same three people. we high people out on an as-needed basis. has we have to look at is technology and the recession has given us a free rand economy, a lot of people are working for many people collecting many paychecks and the businesses that aren't, the restaurants that were mentioned, or retail stores, people aren't spending enough money to go into those places that those people need to staff up. there's two different things going on that are impacting the economy. >> do you think this is a sea change? that this is going to stick even as things get better here? we will kind of stick with this freelance contractor economy? >> i think to a certain extent, yes. i think the world changed and people will have to get used to the fact a lot of people are not going to dealing with full-time employment. >> there was something in your
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report about people doing contract work or being freelancers, and maybe there's something there. maybe all of these people have been gearing up to start their own thing and then hire more people as the economy gets better? >> well, we hope that's the case. in fact, if you look at another statistic in our report it shows that the overall number of start-ups including a lot of the people that are on this show. people that only have one employee and themselves, the total start-up is actually up. down, the number of employee start-up. hiring one person. i think a lot of conversation you've heard reflects the fact we have a lot of consultants or freelancers starting businesses, but if you add up all the jobs they're creating including the jobs for themselves, they're still not creating as many jobs as doing collectively before the recession. >> thank you for coming in and talking to us. very interesting. thanks so much. and you know, we are talking
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about all of these big picture things and what this means for the economy, but, really, for so many small business what's they're thinking salve the big picture. i care about what's going on in my four walls and how do i grow people. so, reba, this is where we called you in, and we hooked reba up with the owner of a house cleaning company who needed advice how to tidy up her particular business. she had been spending so much time on her company she accumulated a little professional clutter, shall we say. you'll see in a minute. so -- you're laughing, reba. so i am. the time had come to give her business a scrubbing. ♪ >> i'm really looking forward to it criticism what we can do around here. as long as you're positive light i won't be upset. >> reporter: owned three businesses of dana's
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housekeeping for about four years. >> one in fresno and one in southern california -- >> reporter: from her company's headquarters in sacramento, california, she run as business with one full-time employee add about 60 independent contractors. >> dana's is a referral agency. we provide house cleaning services typically we have our clients make a priority list of the chores they'd like us to do and we're very flexible. tub, toilets, dust, some laundry, clean the fridge this visit, chase the cobwebs. >> reporter: changing this, after she said the business could use some help. >> a business in dire straits, at least in the 19th century. >> reporter: whatever, connie was ready for the challenge. >> i've got to sit outside, look at business and not upon myself as failing when i know i'm not failing but i know i can do better. >> reporter: the next day we got down to work. reba, the ceo of grow biz media
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showed up to assess the situation. >> hi, reba. >> hi. connie. >> nice to see you. >> thank you for coming. >> reporter: the first thing to tackle, way dana's housekeeping schedules its contractors. >> take a look at wall and get it over with. >> what is that wall? that is a frightening wall. >> "the wall." actually called the scheduling system. >> reporter: the wall scheduling system takes up a quarter of the office. everything is done by hand. the paper and push pins are color-coded but the information isn't saved on any computers. it's a system very few understand. >> i do have one of these that's coming in and helping me now, because the filing's out of control and this is out of control. >> reporter: speaking of customer file. guess what's next? much like the schedules, these records are all handwritten. >> i'm curious about all of those boxes over there. can you, like, talk to me about -- >> if you don't like this, you're really not going to like that. >> reporter: the boxes are
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broken down into categories, like branch and client status. none of the names, numbers or addresses are saved anywhere else. >> this is really scary to me. i mean, a fire, and you're just -- it's just what's in yours and jackie's brain. >> reporter: and finally, marketing. dana's gets the word out with ads in the local newspaper, referrals and call tosses former customers. >> jan, it's connie at dana's housekeeping. >> we send a post card backup. sorry we miss ud by phone. here's the specials, give us a call. we get those, too. >> you have a ton of prior and occasional? just you and jackie are on the phone calls those? >> yes. and sometimes i bring somebody in. >> reporter: keep in mind, connie and her right hand jackie both have computers on their desk, but what are they used for? >> the website. >> and -- >> and everything else jackie has in her computer. >> reporter: what does jackie think about all this? >> definitely not the best way.
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we spend a lot of time, waste a lot of time, looking for client cards, filling out client cards. >> reporter: and connie agrees. she says she's never taken the time needed to properly upgrade the companies infrastructure. >> you really can't grow, because you're so tied up, your energy and your time into maintaining this system, which there's so many other ways -- simple ways -- to do it that you're going to actually be astound and go, really? i can do that? that can happen. so we're going to talk about that next. >> reporter: reba's first and most significant piece of advice, get new computers. >> computers are a little old, a little out of date, and because you're going to have to be getting some software, you want to make sure your computers can handle it. it's just two computers. so you can go anywhere. a big box store, order them online. it doesn't really matter. >> reporter: and with those new computers, reba wants connie to invest in a contact management system. >> there's two different one. there are, you know,
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computer-based systems, and there are web-based systems, and so you're going to have to figure which one you want better. just go online and look them up and see, oh, i think i can deal with that, and that's where after you buy that system and install it, the whole family who -- everybody who can type, comes in here, gets those cards and gets them in there. >> reporter: reba says the cms will make dana's marketing easier. >> i've been listening to you today. booked a lot of new customers today. i didn't hear you ask for anybody's e-mail address. you want everybody's e-mail address. start collecting them so you can put them in the system. if you want to push out a special. you can't sit there and call every client and say, hey, we're having a deal. so you can push it out with an e-mail. >> reporter: and once all that information is saved, rieva says connie needs to back up her files in the cloud. >> have a computer crash. your computer can go kaplooy.
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in the cloud, you don't have to worry about it. you could go to the beach and access your system, because it's not here in the computer. it's out there. >> reporter: and finally, rieva says the scheduling board needs to go. if connie invests in a system for customers she must also find a program that caters to her contractors. >> what i will do to make sure the person who really loves computers is doing this job. >> reporter: and what does jackie think about that? >> i'm really excited. i now have a really good excuse to really push connie forward and say, hey, we've got to do this. we've got to get this done. >> reporter: sure, con hay a little bit of work ahead of her, but a goal in mind and she wants to achieve it. >> you could go on forever working with this system. >> yes, i could. >> but -- >> i'm very tired. >> it's time to move o. absolutely time to move o. think of all the things you'll be able to do once you get changed. >> that's what's on my mind.
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freedom, more marketing, more growth. the whole nine yards. i see it as a real window of opportunity. so, everyone in here just looked at those files and thought oh, my god! >> it was so frightening. >> talk about inefficient. >> so frightening. somebody lights a match and her business is gone. it's just gone. >> not to mention, it's so easy to -- make that easy. they were making that so hard for themselves. >> it s. thank you for going in there and showing, shedding some light on the 21st century. how are things going now have you checked in with them? >> i did. i talked to connie this morning and am really excited. the big news is, the board is still up there, but she's moving offices and she promised me the board is not going with her. so that i think is a big accomplishment. what she's doing is she's starting the input with her
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smaller office in fresno and everything's going into the computer. and she is -- she's testing all of these 30-day stapes. all of these customer management systems. she says everybody has a 30-day free trial. she's trying everybody out for 30 days and she's going to do that a couple months and then pick one. >> we applaud her. i want to check in with that company again in a year from now, and i predict tremendous growth, just because now they'll have time to grow their company a little bit more. >> exactly. >> rieva, thank you for doing that. it was fun. >> thank you. debt has been on everyone's mind on a national scale. but it's an issue that faces small business owner as well. here now are five tips to get every courtesy of the book debt-free for life by david bock. all progress, making a real decision, recognizing how much business you have and become motivated to pay it off. do the debt math.
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pay more than the minimum payment whenever possible and you'll soon find yourself with a far more manageable pile of debt. negotiate a lower interest rate. if you have business credit card debt, the lower the interest rate, the more money you'll save. aim for a high credit score. your credit score is very important to your business dealings. peiing down debt will dramatically increase your score. finally, if you don't have cash, don't buy it. don't borrow money to buy resources your business doesn't need. when we come back, we'll answer some of your business questions, including one about the quickest way to get $250,000. and, marriage works for her professionally and personally. carly, best known as one of the founders of "the knot" in this week's "learning from the pros."
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this is my band from the 80's, looker. hair and mascara, a lethal combo. i'm jon haber of alto music. my business is all about getting music into people's hands. and the plum card from american express open helps me do that. you name it, i can buy it. and the savings that we get from the early pay discount has given us money to reinvest back into our business and help quadruple our floor space. how can the plum card's trade terms get your business booming? booming is putting more music in more people's hands. in 1996, carley roney and her husband david started a one-stop wedding planning site for engaged couples. since then the power couple expanded the knot into an all
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encompassing media company that includes everything from weddings to baby. this year they remain named it to bet e reflect the growing life stage brands. today we talk about finding the ying to your yang and putting away your pride. ♪ gee, i really love you, and we're going to get married ♪ going to the chapel of love ♪ >> planning a wedding was complete lay nightmare when i had my wedding and the industry was terribly outdated. it was super traditional. it didn't reflect the world i saw around me, and my husband was chinese, and there was nothing out there for a little white girl marrying, like, a chinese guy, and those are the moments you're like, wait. this shouldn't be this way. you're throwing a fantastic party. this is your oscar moment and i realized, if you could change it, revolutionize it, use
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technology and style, then it was something i could get my head around and that was my passion for changing the world of weddings came from. ♪ hey, baby, i think i want to marry you ♪ >> we found over the years that all of our opportunities truly come from come from listening to our audience. we were concentrated on the wedding space and drew this massive community where people were talking all the time and exchanging advice and in addition getting advice, what happened was we started getting e-mails from the message board saying there were all these girls talking about things that were not weddings. we particular a look and is anyone else doing that? what is my ira? they are going on with their lives. we started the message boards geared towards the newlyweds.
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we were cofounders and it has been amazing for us. we are a yin and yang. he is all business and strategy and i'm extremely creative and operational at the same time. if you can find no other option on the planet than to be in business with your spouse, make sure you know who does what. when there is too much cross over, it not only can cost the relationship and that's not a good thing. if you can be a power house together, it can be a pipping combination. you need to put away your pride. you have to be willing to really put your neck out there. i remember after one of them, i was speaking at the dplamorrous fashion show. it was a disgusting day in the
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basement of a hotel and four people turned out. there bone-crushing humiliating moments in being an entrepreneur. >> time to answer your business questions. les and brad are with us once again. if you have a really good product, do you invest in your sales staff or do you use the money for something else? it's such an open question, it depends on how good your product is. do you have enough to sell? a lot of people have them. how do you in general figure out where to put your money? >> i think what the specific question is, how much does it cost to get 1% more market share. as long as the curve hasn't split, once you get to the stage
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where getting 1% is too much of a commitment. find something else to sell. >> makes it easy. >> in my opinion, sales and marketing go hand in hand. you have to figure out the economics, but how much you want to dedicate to support the sales staff. i try to find somebody that leads the staff because leadership and understanding on how to grow the business is important. >> it's such an important person to hire. they are the face of your company. >> this is about the fastest way to find funding. >> i'm electrlooking to raise $250,000. is there a quick way to do that? >> not if you are talking smart money. everybody will take time to do due diligence. the most important is to have your materials together. understand what the cap
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structure is and you understand what terms you are offering so if you find someone interested, you are prepared to take the money. having the right corporate structure to having a use of procee proceeds. >> for $250,000, where do look? >> you have to make the statistics work by pitching to far more people than you think you have to. what happens a lot in that area is that people go to one or two sources and get hung up on trying to convert just the one or two sources. >> then something happens. >> you get emotionally called in and you are not in a position to do that. go anywhere. talk to people like that. i would go to every opportunity you could. >> it is time consuming to raise money and it takes time away
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from working in your business. >> you need to focus on it and there a lot of groups popping up to get selected to be one of five or 10 companies. >> not everyone fits into that. >> think to some extent you have to turn over every stone. you find freem all different industries. you have to focus on tech, but there is somebody in the back of the room that told their company for $50 million. >> those companies are great places to go for advice. i'm not in tech, but do you have advice for me. >> people like giving advice. let's go to a question about marketing. >> i am finding it difficult to market certain products in the digital era with noise on the
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internet. how would you market the product. >> it's so true. 10 years ago you could send out an e-mail and people open it. now everyone just deletes it. there is a left noise. there is facebook and twitter, but how do you get it to stand out. >> work your twitter account and facebook and spend time and invest in it. throwing a little bit out to each which is what i see, you get nothing from anything and it's frustrating. >> this is no different than people asked about television. >> what les is leading to is online you can still identify your customers. understand who your customer is. you may try google ad wares and they don't work. facebook ads work, but you are
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targeting to women 18 to 34 and you can refind your marketing and target directly to that audience. it's about figuring out what works and backing into the economics and targeting. >> you can find so much information about people responding to you. >> almost too much. >> you can be overwhelmed. appreciate the advice. if you have a question our experts, the address is open submit the ask the show link. open business or e-mail us your questions or comments. want to take your advertising and marketing to the next level and don't know where to start? check out our website of the
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week. a web ap is designed to take the guesswork out of your strategy. for $20 a month, they analyze business performance and give suggestions on how to improve your strategy to get sales up. you can track as well as set sales goals for your small business. to learn more, click on the website. open business. web exclusive content to help your business agree. don't forget to be a fan of your show on facebook. you can follow us on twitter. next week, your business celebrates our sixth year. we will look at our favorite stories of the last 12 months. stories that took me around the country. whitewater rafting to hot air ballooning in the napa valley to a gun shop in cleveland to find
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out how small businesses are surviving and agreeing. remember, we make your business our business. this is my band from the 80's, looker. hair and mascara, a lethal combo. i'm jon haber of alto music. i've been around music my entire life. this is the first alto music i opened when i was 24. my business is all about getting music into people's hands. letting someone discover how great music is, is just an awesome thing. and the plum card from american express open helps me do that. i use it for as much inventory as i possibly can. from maracas... to drums... to dj equipment... you name it, i can buy it. and the savings that we get from the early pay discount on those purchases has given us money to reinvest back into our business and help quadruple the size of our floor space.

Your Business
MSNBC July 31, 2011 7:30am-8:00am EDT

News/Business. A focus on issues facing small business in the United States. New.

TOPIC FREQUENCY Us 8, Jackie 6, Reba 4, Dana 3, Mascara 2, Fresno 2, Rieva 2, Jon Haber 2, J.j. Ramberg 1, Google 1, Web Ap 1, Fte 1, Stapes 1, Brad 1, Jan 1, Oscar 1, Robert Leighton 1, Ira 1, Carley Roney 1, Msnbc 1
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on 9/4/2011